Appendix — Dandy v. United States

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APPENDIX A

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 24

Nos. 92-1702/1840

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA, )

Plaintiff-Appellee, _)

) ON APPEAL from

) the United States

v. ) District Court for

) the Eastern District

ALEX DANDY, ) of Michigan

Defendant-Appellant. )

Decided and Filed June 7, 1993

Before: MILBURN and RYAN, Circuit Judges; and

COFFIN, Senior Circuit Judge. *

MILBURN, Circuit Judge. Defendant Alex Dandy

appeals from the judgment of the district court dated May 22,

1992, on his convictions-on ten counts of tax offenses, mail

fraud, bankruptcy fraud, and obstruction of justice, all

resulting from the jury’s finding him guilty. He also appeals

* Honorable Frank M. Coffin, Senior Circuit Judge, United

States Court of Appeals for the First Circuit, sitting by

designation.

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from the district court’s "Corrected Judgment" entered on

June 29, 1992, which eliminated an ambiguity in the judgment

concerning his parole eligibility date. On appeal, defendant

raises the following issues: (1) whether the trial judge erred

in ruling that the judge’s acquaintance with a government

witness did not require his recusal, (2) whether the district

court’s limitations on cross-examination and its admission of

certain evidence denied defendant his Sixth Amendment right

to confront witnesses against him, (3) whether prosecutorial

misconduct deprived defendant of a fair trial, (4) whether the

district court’s questioning of witnesses and commenting on

the evidence deprived defendant of a fair trial, (5) whether

Counts 1 and 2 of the indictment alleging tax evasion are

barred by the statute of limitations, (6) whether Count 8

properly charged a violation of the mail fraud statute, (7)

whether Count 9 properly charged a violation of the mail

fraud statute, (8) whether the district court committed

reversible error in refusing to instruct the jury that repayment

is a factor to be considered in determining whether a

particular transaction is a loan, and (9) whether the district

court lacked jurisdiction to enter its corrected judgment. We

affirm in part, vacate in part, and remand.

I.

A.

Defendant Alex Dandy purchased and controlled

Hamady Brothers Food Markets, Inc. ("Hamady”) through a

holding company owned by his family trust. Dandy assumed

control of Hamady’s business in 1981.

McDonald Dairy was Hamady’s dairy supplier, and it

followed the common industry practice of paying rebates to its

customers based on the volume of their purchases. Beginning

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in late 1981, Dandy directed Hamady’s accounting department

to cash the rebate checks but to account for them as "gift

certificates" issued to "Alex Dandy" rather than as rebates

earned by Hamady. Dandy then endorsed each gift certificate

and directed the accounting department to apply them as

credits to his personal loan account with Hamady, thereby

reducing the amount he owed. From 1982 to 1984, Dandy

diverted more than $1 million in McDonald Dairy rebates

through this gift certificate scheme. He also received small

amounts from other wholesalers supplying goods to Hamady.

He did not report any of this money on his personal income

tax returns for 1982 through 1984.

During this same period, defendant also demanded that

McDonald Dairy pay numerous bills he had incurred for items

such as airline tickets, televisions, and limousine service.

McDonald Dairy paid the bills in order to avoid losing its

business to Hamady. Other suppliers also agreed to make

such payments at Dandy’s direction.

In one scheme, a bank account was opened by

defendant’s friend, Father Basil Kalekas, under the auspices

of the "St. George Orthodox Church Pastor’s Charitable

Fund." Nearly all the money deposited to this fund was paid

under Dandy’s direction by Hamady’s suppliers or by Hamady

itself. About 80 percent of the money was then withdrawn as

cash and given to defendant. Father Kalekas paid some small

personal bills for charitable expenses from the fund, but all

checks in the amount of $500 or more were paid at Dandy’s

direction to or on behalf of himself or his friends for their

personal use. When Father Kalekas died, defendant demanded

and received the remaining $27,000 in the fund from Kalekas’

widow. During the years 1982 through 1984 and 1986,

Dandy received about $375,000 in such third-party payments,

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including $157,500 paid to the Pastor’s Charitable Fund which

Dandy never declared on his personal income tax returns.

Also during late 1981, Dandy began to obtain

kickbacks from another Hamady supplier, M & B Distributors

("M & B"). He told M & B to raise the markup M & B

charged Hamady by one-half percent and to use the resulting

money to pay a salary to Dandy’s son-in-law, David Kirdassi.

Kirdassi never did any work whatsoever for M & B but

received $38,400 yearly from 1982 through 1985 and an

additional $6,400 in early 1986. None of these kickbacks

were reported on Dandy’s income tax returns.

On January 24, 1985, an Internal Revenue Service

("IRS") agent issued a summons to McDonald Dairy for

records of rebate moneys it had paid to Hamady “or any

officer" of Hamady. Defendant sought to cover up his gift

certificate scheme by hiring new accountants, signing a note

to pay back Hamady for the rebate moneys he had diverted to

his account, and directing Hamady to file amended income tax

returns declaring that the moneys were corporate income.

In November 1985, a second IRS subpoena was served

on McDonald Dairy for records of rebate moneys paid during

1980, 1984, and 1985. Again, defendant directed McDonald

Dairy to give the IRS only those checks payable to "Hamady

Brothers Food Markets" and to withhold all checks which

represented payments directly or indirectly to himself.

In March 1986, Dandy purchased options to buy all the

common stock of Nu-Trax, Inc., d/b/a "Chatham Super

Markets ("Chatham/Nu-Trax"). He also acquired proxies to

vote all of the Chatham/Nu-Trax stock, gaining complete and

exclusive control over the corporation. Using his control,

defendant Dandy caused Chatham/Nu-Trax to greatly increase

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its purchases from certain suppliers whom defendant directed

to inflate their prices in order to pay for such things as a sham

salary to his son-in-law and kickbacks to defendant’s solely

owned corporations. ADI International and Michigan Milk

Movers, Inc. The sham salary and kickbacks were for

“consulting fees" even though these entities provided no

services whatsoever for anyone. The suppliers involved in the

schemes included M & B Distributors, McDonald Dairy, and

London’s Farm Dairy ("London’s") and the schemes involved

several hundred thousand dollars.

Defendant Dandy also diverted numerous Chatham/Nu-

Trax assets to himself causing Chatham/Nu-Trax to sell

tractors, trailers, and other equipment to its suppliers at very

low prices. He ihen directed the suppliers to pay the

remaining value of this equipment to his wholly-owned

corporation, ADI International, as “consulting fees," even

though ADI International provided no consulting services. He

also directed Chatham/Nu-Trax to pay ADI International over

$275,000 in bogus “consulting fees." By 1986, it was clear

that bankruptcy was inevitable for Chatham/Nu-Trax.

Defendant then sold his worthless option on Chatham/Nu-

Trax’s remaining stock back to Chatham/Nu-Trax, forcing it

to pay him cash and transfer real estate worth over $7 million.

However, he kept his proxy for exactly one year and one day

in order to prevent Chatham/Nu-Trax from declaring

bankruptcy during the one-year period within which his option

sale could be rescinded as an avoidable transfer under

bankruptcy law. Chatham/Nu-Trax and Hamady declared

bankruptcy in 1987.

Dandy then declared on his 1986 income tax returns

the $7 million he had received for the sale of the option as a

capital gain, thereby reducing the tax declared. However, he

omitted from the return income he had received in the form of

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kickbacks, payments by suppliers for personal services, and

sham salaries paid to his son-in-law and his son’s girl friend.

On December 14, 1990, an indictment was returned

charging defendant Dandy with tax evasion, willfully filing

false returns, mail fraud, and bankruptcy fraud. On April 12,

1991, the grand jury returned a superseding indictment

charging defendant in Counts 1 through 3 with tax evasion for

the years 1982 through 1984 in violation of 26 U.S.C.

§ 7201; willfully filing false amended returns for 1982, 1983,

and 1986 in Counts 4, 5 and 11 in violation of 26 U.S.C.

§ 7206(1); obstructing an IRS audit in Count 6 in violation of

18 U.S.C. § 1505; mail fraud in Counts 7 through 9 in

violation of 18 U.S.C. § 1341; and bankruptcy fraud in Count

10 in violation of 18 U.S.C. §§ 152 and 2(b). Trial began on

September 19, 1991, and concluded on November 20, 1991.

The jury returned a verdict of guilty on all counts except

Count 7 which had been dismissed by the district court. The

district court sentenced defendant to a total of twenty-three

years’ imprisonment on May 22, 1992, and entered judgment

on June 3, 1992. A timely appeal followed. On June 29,

1992, the district court entered’a “Corrected Judgment.” A

timely appeal again followed. |

IT.

A.

Defendant Dandy argues that District Judge Cleland

should have recused himself pursuant to Dandy’s motion under

28 U.S.C. § 455(a) because of Judge Cleland’s acquaintance

with Douglas Mowat, President of London’s Farm Dairy, and

with certain members of the London family. We review a

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district court’s refusal to grant a motion for recusal for abuse

of discretion. Easley v. Univ. of Michigan Bd. of Regents,

906 F.2d 1143, 1146 (6th Cir. 1990), cert. denied, 111 S. Ct.

1414 (1991).

Section 455(a) states that

any justice, judge, or magistrate of the United

States shali disqualify himself in any

proceeding in which his impartiality might

reasonably be questioned.

First in chambers and then on the record on May 19,

1991, Judge Cleland informed the parties of his acquaintance

with Mowat and the London family. He explained that he had

a casual acquaintanceship with Douglas Mowat, an executive

of London’s, in that he had seen him at community functions,

dinners, and fundraiscrs over the years. However, Judge

Cleland stated he had not seen Mowat in over two years, had

never been to Mowat’s home, and Mowat had never been to

his home.

Judge Cleland also stated he had been acquainted with

the London family for close to thirty years and that a senior

member of the London family, who is no longer associated

with London’s Farm Dairy, was an “across the street

neighbor” when Judge Cleland was in college and law school.

He also stated that while he was a prosecuting attorney for St.

Clair County, Michigan, Mr. Mowat and “others from the

London organization" may have contributed $10 to $20 apiece

to his campaign. J.A. 698-700.

A district court judge must recuse himself where “a

reasonable person with knowledge of all the facts would

conclude that the judge’s impartiality might reasonably be

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questioned. This standard is objective and is not based ‘on the

subjective view of a party.’" United States v. Nelson, 922

F.2d 311, 319 (6th Cir. 1990)(citations omitted; emphasis in

original), cert. denied, 111 S. Ct. 1635 (1991). Where the

question is close, the judge must recuse himself. Roberts v.

Bailar, 625 F.2d 125, 129 (6th Cir. 1980).

Defendant has sought to characterize Judge Cleland’s

relationship with the London family as a lifetime friendship.

However, Judge Cleland’s disclosure reveals that his

relationship with the London family and with Douglas Mowat

is merely that of an acquaintance, not an intimate, personal

relationship or a relationship in which Judge Cleland would be

obligated to the London family or to Mowat. Cf. In re

Faulkner, 856 F.2d 716, 721 (Sth Cir. 1988). In this case,

Judge Cleland was not called upon io evaluate the credibility

of Mowat because defendant Dandy was tried by a jury.

Furthermore, Mowat was simply one of many government

witnesses and did not have a personal stake in the outcome

which might have influenced Judge Cleland.' Cf. Hadler

v. Union Bank and Trust Co. of Greensburg, 765 F. Supp.

976, 979 (S.D. Ind. 1991).

Finally, defendant argues that London’s was considered

by Judge Cleland to be a victim of defendant’s crime and that

because of his relationship with the London family there is an

appearance of partiality in favor of one of the executive

officers of London’s. Defendant refers to a statement that

Judge Cleland made at sentencing in which he said that

defendant had "financially seduced merchants." J.A. 764. It

is not at all clear from the record that Judge Cleland was

referring to London’s. Nevertheless, even if he were, the

; The government in its brief states that Mowat was one

of 56 witnesses.

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London Dairy Farm was not a victim in the sense that it

suffered injury, i.e., it received more business as a result of

its agreement to make personal payments to defendant. In any

event, Judge Cleland’s relationship with the London family

and Mowat was not of a sufficiently intimate degree to induce

a reasonable person with knowledge of all the facts to

conclude that Judge Cleland’s impartiality could be reasonably

questioned.

B.

Defendant Dandy argues that the district court

erroneously deprived him of his right to confront witnesses

guaranteed by the Sixth Amendment by limiting his cross-

examination of several witnesses and by admitting hearsay

statements made by witnesses defendant was unable to cross-

examine. However, defendant has mischaracterized what

actually occurred at trial and the reasons for which the district

court limited cross-examination. In most cases, the district

court limited cross-examination or recross-examination

because the questions went beyond the scope of direct or

redirect examinations. The district court, however, gave

defendant the opportunity to call these witnesses himself.

Defendant also argues that the district court erred in

allowing hearsay into evidence. At trial, Sylvia Sophiea, a

former church secretary who occasionally took messages for

defendant Dandy’s friend, Father Kalekas, testified for the

government. The government asked her about one occasion

when she told Father Kalekas that defendant had telephoned

him: “Did Father Bill give you any directions at that time

concerning Mr. Dandy?" J.A. 346. Sophiea’s answer was

that Father Kalekas had angrily replied, "[{T]ell him to get off

my back and get himself another patsy." J.A. 354. Defense

counsel objected on the basis of hearsay. The government

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argued that it was not hearsay because it was not introduced

for the purpose of proving the truth of a matter asserted.

Rather, it was offered to establish a breakdown in the

relationship between defendant and Father Kalekas. The

district court expressed doubt that the statement was in fact

heresay; however, it eventually admitted the statement on the

basis that it fell under the exited utterance exception to the

hearsay rule. The court later denied defendant’s motion for

reconsideration stating simply that defendant had presented the

same issues for reconsideration previously ruled upon by the

court.

The government continues to assert that the statement

at issue is not hearsay in that it was not offered to prove the

truth of the matter asserted. See United States v. Ellzey, 874

F.2d 324, 330 (6th Cir. 1989). Relying on United States v.

Cruz, 805 F.2d 1464 (11th Cir. 1986), cert. denied, 481 U.S.

1006 (1987), the government argues that an instruction such

as the one given by Father Kalekas to Sophiea is not an

assertion capable of being true or false and therefore cannot

constitute hearsay. In Cruz, a law enforcement officer

testified that he had asked one Jeanne Berry to introduce him

to her supplier of cocaine. Berry later brought defendant to

meet the officer, and thus the officer’s statement was highly

relevant because one could infer from his statement and

Berry’s subsequent action that the defendant was Berry’s

supplier. Jd. at 1477. The Eleventh Circuit held that this out-

of-court-statement was not hearsay because (1) it was not an

assertion capable of being true or false, and (2) the statement

was Offered solely for the fact that it was made and the effect

it had upon the hearer. /d. at 1478.

Defendant is correct in arguing that Cruz differs from

this case in that Father Kalekas’ statement was not offered in

order to show the effect that it had upon its hearer, Sophiea.

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However, the fact remains that Father Kalekas’ statement was

not offered to prove the truth of the matter asserted. In fact,

as previously discussed, his statement was not an assertion.

See United States v. Gibson, 675 F.2d 825 (6th Cir. 1982),

cert. denied, 459 U.S. 972 (1982). Rather, the relevance of

this statement lies in the fact that what was said indicated a

breakdown in the relationship between Father Kalekas and

defendant. Therefore, the district court did not abuse its

discretion in admitting the statement. In this connection, we

stated in United States v. Hathaway, 798 F.2d 902, 905 (6th

Cir. 1986), that

when a statement is offered to prove neither the

truth nor falsity, there is no need to assess the

credibility of the declarant. The significance

lies entirely in the fact that the words were

spoken. Thus, the statement does not fall

within the Rule 80i(c) definition of hearsay nor

would the purposes of the hearsay rule be

served by treating it as hearsay.

Thus, since the statement at issue does not constitute

hearsay, it is unnecessary for us to consider whether the

statement complies with the excited utterance exception to the

hearsay rule.

Defendant next argues that the district court erred in

allowing a statement by Wendell Smith, President of

Chatham/Nu-Trax, that he knew the price of dairy products at

London’s rose after defendant took control of Chatham/Nu-

Trax because "[t]he people in the dairy department [London’s]

said that the price of milk had gone up." J.A. 433. Defendant

objected to this statement on the grounds of hearsay at trial,

and the government agreed. The government also stated that

the statement was not offered to prove the truth of the matter

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asserted and suggested that the district court may wish to give

a limiting instruction. In its brief, the government argues that

the statement "was offered only to show what Mr. Smith’s

state of mind was — an issue relevant to Smith’s acquiescence

in Dandy’s scheme to sell the worthless stock option."

Government’s Brief at 24. The district court responded to the

government’s suggestion that it give a limiting instruction by

stating that “such an instruction is not necessary under the

circumstances and the evidence that we have in hand already

unchallenged." J.A. 434.

We do not see how the statement at issue is relevant to

Smith’s acquiescence in Dandy’s plan to sell Chatham/Nu-

Trax’s stock option; nor is it clear how Smith’s acquiescence

to the plan was relevant in proving defendant’s guilt or

innocence of the offenses for which he was charged. In any

event, a review of the record reveals that the statement was

offered to prove that the price of London’s milk rose after

defendant Dandy took over Chatham/Nu-Trax. Thus, it was

inadmissible hearsay. Nevertheless, Mr. Mowat had already

testified at the trial that London’s prices had risen when

defendant Dandy became involved in London’s. Therefore,

we find that the admission of Smith’s statement into evidence

constituted harmless error because, as the district court found,

evidence of defendant’s effect on London’s milk prices had

already been admitted and was uncontradicted by any other

witness. ? See Ellzey, 874 F.2d at 330.

, Defendant states that Mowat’s testimony was “hotly

contested"; however, defendant cites to no other witnesses

who disputed Mowat’s testimony. Rather, defendant focuses

on Mowat’s credibility as a witness.

C.

Defendant Dandy argues that the government engaged

in prosecutorial misconduct which warrants a reversal of his

conviction. Defendant cites no fewer than twenty instances of

alleged prosecutorial misconduct which took place over the

ten-week trial. These instances can be group into five

categories: (1) inflammatory language which prejudiced the

jury against defendant, (2) gestures and facial expressions

calculated to be prejudicial to defendant, (3) interjection by

government counsel cf himself as a witness at trial and asking

questions without a factual basis, (4) interruptions designed to

disrupt defense counsel, and (5) improper comments on the

evidence.

Prosecutorial misconduct warrants reversal of a

conviction only if it "permeates the entire atmosphere of the

trial." United States v. Cummins, 969 F.2d 223, 227 (6th

Cir. 1992). Determining whether an error is reversible

requires a review of the record as a whole. United States v.

Solivan, 937 F.2d 1146, 1155 (6th Cir. 1991). Factors to

consider are the strength of the evidence against the defendant,

the potential for prejudice to the defendant, and the timing and

firmness of the district court admonition, if any. Cuwmmins,

969 F.2d at 227; Solivan, 937 F.2d at 1157. Where the

government’s conduct is, in fact, unconstitutional, "[i]t is

incumbent upon the government to demonstrate that such

constitutional error, resulting from the admission of highly

prejudicial evidence or comment, is harmless beyond a

reasonable doubt." Solivan, 937 F.2d at 1155.

A review of the record reveals that this was a heated

trial and that emotions ran high on each side. The district

court cautioned counsel for both the defense and the

government regarding potentially prejudicial conduct such as

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excessive facial expressions, gestures, gasps, and loudly

whispered conversations between attorneys seated at counsel’s

table. In each case where the prosecutor became too Zealous,

the district court acted promptly to respond to the defense’s

objections and admonish the prosecutor.

As previously stated, defendant argues that the

prosecutor interjected himself as a witness in the trial and

asked questions for which there was absolutely no factual

basis. At trial, the prosecutor attempted to question defense

witness Norris Toney, a former commissioner with the Human

Relations Commission of the City of Flint where he worked

to raise money to assist people in the community, regarding

whether he had delivered money for a Mr. Barge, his then

supervisor, to a General Motors supervisor.

Question: You never delivered any payments

of any money for him [Mr. Barge] to GM

officials?

Answer: No.

Question: Well, you did, in fact, testify about

that, didn’t you, sir?

Answer: Yes, I did.

Question: Is that not true, sir? Mr. Toney,

did you not testify that you delivered money

from Warren Barge to a General Motors

supervisor?

Answer: No.

J.A. 610.

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Defendant argues that the government had absolutely

no factual basis with which to question defense witness Toney

regarding a delivery of money to a General Motors

supervisor. In United States v. Brown, 519 F.2d 1368, 1370

(6th Cir. 1975), we held that the government committed

reversible error by questioning a witness regarding previous

testimony in another court proceeding where the records of the

trial provided no basis for the government’s questions. Later

in the proceedings in this case, however, and out of the

presence of the jury, witness Toney did in fact admit that he

had delivered money from Barge to a General Motors

supervisor. J.A. 615.* Thus, a factual basis did exist for

the prosecutor’s questions.

Defendant also objects to certain questions the

government asked of Toney regarding his relationship with

one Mattie Fordham. The prosecutor asked Toney if he were

aware that Ms. Fordham, with whom he worked on the

Human Relations Commission, had pled guilty to a federal

crime and had been convicted of a federal crime. These

questions were not asked in front of the jury, but defendant

moved for a mistrial. At a later hearing on this motion, the

prosecutor stated that a search of his records revealed that Ms.

Fordham had not been convicted of a federal crime but that

several years earlier he had agreed to put Ms. Fordham in a

pretrial conversion program because of her misapplication of

the Human Relations Commission’s funds. The prosecutor

also stated that a search of his records revealed he had

prosecuted several of Ms. Fordham’s family members for

federal crimes. Because the jury never heard this line of

questioning, it could not have prejudiced the jury against

* Toney stated that he did deliver money to a Don Anderson,

a GM supervisor, "for the purpose of his house." J.A. 615.

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defendant, and, therefore, even though the prosecutor’s

questions were improper, they do not warrant a reversal.

Defendant also argues that in his closing argument, the

prosecutor, while vouching for a witness’s credibility, made

highly prejudicial comments which warrant reversal. The

following took place during the government’s closing

argument:

Prosecutor: But Mr. McColgan is an honest

man, he told the truth to the FBI and he told

the truth to you. ...

Defense Counsel: Your honor, I’m going to

object to the prosecution vouching for the

credibility of the witness, giving his opinion as

to the credibility of the witness.

The Court: There may be merit to that

objection, Mr. Haveland [sic]. The argument

should be restricted to the evidence and

reasonable inferences from the evidence.

Prosecutor: Your Honor, this is all the

evidence. This is the testimony of Mr.

McColgan.

The Court: Let me clarify that any assertions

that are made from evidence, inferences from

precise evidence and — continue with your

argument — [sic] distinguishing the merits of

the objections just raised.

Prosecutor: Well, to make it clear, ladies and

gentlemen, everything I am telling you is based

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on the evidence in this case. If you don’t

remember it the way I am saying it, disregard

what I say. Rely on what you heard. I believe

Mr. McColgan told you that he had told the

truth to the FBI when he was interyiewed by

Agent Clemmer on two or three occasions in

previous years. He admitted to Agent Clemmer

that he had, indeed, paid this kickback. He

was subpoenaed to testify in this case, he was

under oath, he told you he didn’t lie to anyone

and he wasn’t lying to you.

And my point is why would he lie about this?

If there were any incentive on his part to lie, it

would have been to deny that he had paid a

kickback.

J.A. 744-46.

It was improper for the prosecutor to state that Mr.

McColgan is honest. Such a statement conveys a conviction

of personal belief regarding the witness’s veracity. See United

States v. Bess, 593 F.2d 749, 755 (6th Cir. 1979)

("expressions of personal belief of innocence or guilt of an

accused are error"). However, the district court immediately

instructed the jury that all assertions are to be made from the

evidence. The prosecutor then told the jury to "disregard

what I say" if it did not find his statements based on the

evidence. J.A. 745. Moreover, while the prosecutor’s

statement was improper, it was not as egregious as it might

have been had the prosecutor used the phrase "I believe” that

Mr. McColgan is honest. Cf Bess, 593 F.2d at 757 (holding

that prosecutor’s misconduct constituted reversible error where

the prosecutor stated "I believe beyond a reasonable doubt"

that the defendant was guilty and the district court failed to

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give immediate curative admonishment). Given the degree of

egregiousness of the prosecutor’s statement, the weight of the

evidence against defendant, and the district court’s immediate

curative instruction to the jury, the prosecutor’s misconduct

did not constitute reversible error. See United States v. Krebs

788 F.2d 1166, 1177 (6th Cir. 1986), cert. denied, 479 U.S.

930 (1986)(holding that prosecutor’s statement "I want to

suggest to you that in this trial testimony she was telling the

truth" did not constitute reversible error given the substantial

evidence against the defendant and the trial court’s corrective

measures to eliminate prejudice).

D.

Defendant Dandy argues that he was deprived of a fair

trial by the district court’s questioning of witnesses and

commenting on the evidence. In United States v. Slone, 833

F.2d 595, 597 (6th Cir. 1987), we stated:

The presiding judge should conduct a

trial in an orderly way with a view to eliciting

the truth and to attaining justice between the

parties. He must see that the issues are not

obscured and that the testimony is not

misunderstood. The trial court has the right to

interrogate witnesses for this purpose.

The presiding judge, however, must be

careful to “‘always be calmly judicial,

dispassionate and impartial. He should

sedulously avoid all appearances of advocacy as

to those questions which are ultimately to be

submitted to the jury.’" "*The basic

requirement is one of impartiality and

demeanor as well as in actions."

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(Citations omitted.) We also noted three instances in which

a district court “has good reason to interject himself into the

trial." Jd. First, judicial intervention may be necessary for

clarification in a lengthy and complex trial. Second, it may

be necessary for clarification where attorneys are unprepared

or obstreperous or if the facts are becoming confused and

neither side is able to resolve the confusion. Third, judicial

intervention may be necessary if a witness is difficult or if the

witness’s testimony is not credible and the attorney fails to

adequately probe the witness or if the witness becomes

inadvertently confused. Id.; see also United States v.

Blakeney, 942 F.2d 1001, 1013 (6th Cir.), cert. denied, 112

S. Ct. 646 (1991) and 112 S. Ct. 881 (1992); United States

v. Seago, 930 F.2d 482, 492 (6th Cir. 1991).

Defendant’s argument is meritless. First, the district

court did engage in lengthy questioning of a witness regarding

the definition of the terms “backdating,” "imputed interest,"

and "net operating loss carryover." J.A. 408-417. Defendant

objected on the grounds that the district court’s inquiry into

those areas “gives an impression to the jury that the Court

feels that these particular areas are more important than the

other areas." J.A. 420. The district court noted defense

counsel’s objection and then gave a long cautionary instruction

to the jury not to form an opinion regarding the case simply

on the basis that the court had asked these questions.

Second, one juror submitted a question asking, "Why

would you have included payments to Kirdassi as income to

Mr. Dandy when the W-2 was made out to Kirdassi." J.A.

447. Defendant objected on the grounds that the prosecution’s

theory was once again being emphasized to the prejudice of

the defendant. The district court then asked a series of

questions designed to answer the juror’s question.

20a

Third, the court questioned a witness regarding the

difference between a gift and a bribe. Defendant objected on

the grounds that the question highlighted the government’s

case, was prejudicial, and gave the jury the impression that

the district court was prejudiced against defendant. Defendant

also now argues that the questions were prejudicial because

the witness, an IRS agent, testified that any business

entertainment given by one business to another business over

$25 had to be reported as income by the recipient, and if it

was not, then the IRS treated it as a bribe.

As we have stated in Slone, “[t]he fact that testimony

elicited by the trial judge may have damaged appellant’s case,

does not automatically cast the court in the improper role of

surrogate prosecutor." 833 F.2d at 600 (citation omitted).

This was a long and complicated case conducted over a period

of ten weeks and involving difficult concepts. The district

court was justified in reviewing those difficult concepts which

were crucial to the disposition of the case. From the record,

it is apparent that when initially presented by the witnesses,

many of these concepts were not fully explained in terms that

a layman could understand.

Moreover, the questions were stated in a neutral

manner. The court did not interrupt examination by either

party’s counsel and gave defense counsel an opportunity for

follow-up after it asked questions. In addition, as previously

mentioned, the district court at one point gave a lengthy

cautionary instruction to the jury. Therefore, we conclude

that the district court’s questioning did not deprive defendant

of a fair trial. See Slone, 833 F.2d at 600-601 (holding that

the district court did not act improperly by asking witness

questions where it did not interfere with defendant’s cross-

examination rights, court gave the opportunity for follow-up

questions, asked questions for the purpose of clarification, and

2la

gave a cautionary instruction to the jury). In addition, the

district court’s occasional summary of the witness’s

explanations was not improper. “A federal judge may analyze

the evidence, comment upon it, and express his views with

regard to the trial testimony and the witnesses." United States

v. Murdock, 290 U.S. 389, 394 (1933), overruled on other

grounds, Murphy v. Waterfront Comm’n of New York Harbor,

378 U.S. 52 (1964); see also Blakeney, 942 F.2d at 1013

(holding that a district court may "analyze and dissect the

evidence, as along as the district judge does not distort or add

to it"). In this case, the district court was careful to comment

and summarize in a neutral manner for the purpose of

clarification, neither adding to nor distorting the evidence.

E.

Defendant Dandy argues that Counts 1 and 2 of the

superseding indictment charging tax evasion under 26 U.S.C.

§ 7201 are time-barred under the applicable statute of

limitations and that insufficient evidence exists to support his

conviction on these counts. Counts 1 and 2 of the original

indictment allege tax evasion occurring on June 13, 1983, and

July 3, 1984, the dates on which the income tax returns for

tax years 1982 and 1983 were filed. 26 U.S.C. § 6531

provides a six-year statute of limitations period for tax

evasion, and the original indictment was filed on December

14, 1990, more than six years after the tax returns were filed.

However, the government filed a superseding indictment

alleging that acts of evasion relating to tax years 1982 and

1983 occurred through November of 1985. Defendant argues

that the statute of limitations began to run for each count on

the date that each tax return was filed. The government

argues, however, that the statute of limitations for each count

of tax evasion began to run only when the last affirmative act

22a

of evasion occurred, thus bringing Counts 1 and 2 within the

six-year statute of limitations period.

In United States v. Hook, 781 F.2d 1166, 1173 n.9

(6th Cir.), cert. denied, 479 U.S. 882 (1986), we declined to

decide whether the limitations period begins to run when

income tax returns are filed or due or whether the limitations

period begins to run at the last affirmative act of evasion in

furtherance of the crime. However, the two circuits which

have addressed this specific issue have held that it is the date

of the latest affirmative act of evasion that triggers the statute

of limitations. See United States v. Winfield, 960 F.2d 970,

973 (11th Cir. 1992)(per curiam); United States v. Ferris, 807

F.2d 269, 271 (1st Cir. 1986), cert. denied, 480 U.S. 950

(1987). We adopt the First and Eleventh Circuits’ approach

to this issue because to hold otherwise would only reward a

defendant for successfully evading discovery of his tax fraud

for a period of six years subsequent to the date the returns

were filed. For example, in this case, defendant’s evasive

acts in 1985 prevented the IRS from learning about

defendant’s income tax fraud occurring in 1982 and 1983.

Defendant relies on United States v. Habig, 390 U.S.

222 (1968), to support his argument—that the statute of

limitations should begin to run at the time the return is filed.

In Habig, the Supreme Court held that the statute of

limitations for an attempt to evade taxes by filing a false

return under 26 U.S.C. § 7201 began to run on the date that

the returns were actually filed, not the date that they were due

to be filed. The Court determined that to hold otherwise

would be to accept the argument that "Congress intended the

limitations period to begin to run before [defendants]

committed the acts upon which the crimes were based." Jd.

at 225.

23a

Habig actually supports the position that the statute of

limitations for income tax evasion alleged in Counts 1 and 2

in this case did not begin to run until the last affirmative

evasive acts occurring sometime in November of 1985. This

conclusion is so because it is these evasive acts, occurring

within six years of the superseding indictment, which form the

basis of the crimes alleged in Counts 1 and 2 of the

superseding indictment. Finally, this result seems reasonable

when one considers the fact that had it not been for

defendant’s evasive acts in 1985, the IRS would very likely

have discovered defendant’s income tax fraud occurring in

1982 and 1983. To hold that the statute of limitations for

income tax evasion occurring in 1982 and 1983 began to run

on the date the returns were filed would reward defendant for

successfully evading discovery of his tax fraud for a period of

Six years subsequent to the date the returns were filed.

Defendant next argues that evidence of affirmative acts

of evasion within the statutory period is insufficient to sustain

his conviction on Counts 1 and 2. This issue is reviewed on

appeal from the district court’s ruling on either a motion for

a new trial or a motion for judgment not withstanding the

verdict. Dixon v. Montgomery Ward, 783 F.2d 55 (6th Cir.

1986). Defendant does not claim nor does the record reveal

that defendant has made either motion. Therefore, we decline

to consider this issue.

F.

Defendant Dandy argues that his conviction on Count

8 for mail fraud in violation of 18 U.S.C. § 1341 must be

reversed because it was based on a theory not recognized in

this circuit nor alleged in the indictment. Specifically,

defendant argues that the indictment sets forth a constructive

trust theory which is inadequate to sustain his conviction for

24a

mail fraud. Under the constructive trust theory, any economic

benefit acquired by a fiduciary as a result of a breach of his

fiduciary duty owed to a principal is held in trust for the

principal. United States v. Runnels, 833 F.2d 1183, 1188 (6th

Cir. 1987), vacated on other grounds, 877 F.2d 481 (6th Cir.

1989). The constructive trust theory does not require that the

principal has suffered some actual economic loss, simply that |

the fiduciary has benefitted economically from his breach. /d.

at 1187.

The superseding indictment charges that defendant

"devised and executed a scheme and artifice to defraud Nu-

Trax, Inc., d/b/a Chatham Super Markets, by obtaining

money which by law should have been paid or credited to an

account of Nu-Trax, Inc." The district court instructed the

jury that the director of a corporation is a fiduciary of the

corporation and that it is his duty to make the best bargains

possible for the corporation and that any property received

from transactions he conducts on the corporation’s behalf

belong to the corporation. The district court also instructed

the jury that it was not sufficient that defendant may have

simply breached his duty toward the corporation, unless that

breach involved money or property belonging to or required

to be delivered to the corporation.

In this case, the indictment and the jury instructions

make it clear that the defendant could not be found guilty of

mail fraud simply on the basis that defendant as a fiduciary

profited from his breach of his fiduciary duty. Rather, as the

Supreme Court indicated in McNally v. United States, 483

U.S. 350, 360 (1987), Chatham/Nu-Trax must have suffered

a specific property loss above and beyond that created by

defendant’s fiduciary duty to the corporation. Here the

evidence was that London’s Farm Dairy would have charged

Chatham/Nu-Trax lower prices for milk had it not been for

25a

the kickbacks they had to pay to defendant. Because the

indictment, evidence, and jury instructions are all based on

concrete economic harm to Chatham/Nu-Trax, defendant’s

argument must fail. See United States v. Asher, 854 F.2d

1483, 1494 (3d Cir. 1988), cert. denied, 488 U.S. 1029

(1989)("those cases that have sustained mail fraud convictions

have done so where the ‘bottom line’ of the scheme or artifice

had the inevitable result of effecting monetary or property

losses to the employer or to the state.").

G.

Defendant Dandy argues that his conviction on Count

9 for mail fraud in violation of 28 U.S.C. § 1341 must be

reversed because the indictment alleges that defendant engaged

in a scheme to defraud the "future" creditors of Chatham/Nu-

Trax. According to defendant, 2 future creditor has no

tangible property interest and thus has no enforceable property

right under the mail fraud statute. However, Count 9 of the

superseding indictment alleged that defendant defrauded

Chatham/Nu-Trax and its future creditors. In its instructions

to the jury on Count 9, the district court instructed the jury

that it must find the defendant defrauded Chatham/Nu-Trax.

It did not refer to future creditors. Therefore, the jury could

not have convicted defendant on Count 9 unless it found

defendant had defrauded Chatham/Nu-Trax, and thus, it is

unnecessary for us to consider defendant’s argument in regard

to future creditors. See United States v. Ochs, 842 F.2d 515,

520 (1st Cir. 1988).

Defendant also argues that his conviction under Count

9 must be reversed because the district court instructed the

jury to consider defendant’s status as a fiduciary in

determining whether defendant had defrauded Chatham/Nu-

Trax under Count 9. However, the indictment alleged that

26a

defendant defrauded Chatham/Nu-Trax of $7 million in assets

which belonged to the company. These assets are concrete

property interests, and simply because defendant possessed a

fiduciary relationship to Chatham/Nu-Trax which enabled him

to defraud the company of $7 million in assets does not render

his conviction invalid. “See McNally, 483 U.S. at 360.

H.

Defendant Dandy argues that the district court

committed reversible error in refusing to instruct the jury that

repayment is a factor to be considered in determining whether

a particular transaction is a loan. At issue on Counts 1

through 5 was whether the payments defendant received from

Hamady constituted taxable income or loans. Defendant’s

theory of defense was that the payments were loans and

defendant offered as evidence of this theory the fact that

defendant eventually repaid the money to Hamady. The

district court simply instructed the jury that it must consider

whether any funds received by defendant constituted ordinary

income or loans and that it must consider all circumstances

surrounding such payments.

It is reversible error not to present a defendant’s theory

of defense adequately in a full statement of the law. United

States v. Duncan, 850 F.2d 1104, 1118 (6th Cir. 1988).

However, the district court did fully present defendant’s

theory of defense to the jury by explaining that it must

determine whether the money given from Hamady to

defendant was income or a loan. The fact that defendant

eventually repaid the money to Hamady is evidence which the

jury may consider in determining whether the money was a

loan or income, but it is not a legal theory standing alone.

Therefore, the district court’s refusal to give defendant’s

specific instruction was not error. See id.

27a

I.

The government agrees with defendant Dandy that the

district court lacked jurisdiction to file its “corrected

judgment" more than seven days after it entered the original

judgment. Federal Rule of Criminal Procedure 35(c)

authorizes the district court to correct its judgment for clerical

errors only within seven days after the sentence was imposed.

The original judgment stated that the term of the sentence

"ought to be served consecutively under the provisions of 18

U.S.C. § 4205(a) which provides that defendant shall be

eligible for parole at such date as the parole commission may

determine.” However, former 18 U.S.C. § 4205(a), which is

applicable to this case, provided that "a prisoner shall be

eligible for release on parole after serving one-third of such

term or terms... ." The corrected judgment states that the

terms of the sentence "shall be served consecutively under the

provisions of 18 U.S.C. § 4205(a)." It appears that the

district court made a simple error and attempted to correct it.

Therefore, the corrected judgment should be vacated and the

original judgment be remanded to the district court in order to

resolve the contradiction as to defendant’s parole eligibility

date.

Il.

For the reasons stated, the June 29, 1992, corrected

judgment of the district court is VACATED, and the June 3,

1992, judgement of the district court is REMANDED to the

district court for the purpose of correcting the judgment in

order that it conforms to the express intentions of the district

court as stated at sentencing and with the language of former

18 U.S.C. § 4205(a) as it applies to defendant. In all other

respects, the district court is AFFIRMED.

<=

APPENDIX B FILED

AUG 11, 1993

Nos. 92-1702/1840 ‘EONARD GREEN, Clerk

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA, )

Plaintiff-Appellee, )

Vv. ) ORDER

)

ALEX DANDY, )

Defendant-Appellant. )

BEFORE: MILBURN and RYAN, Circuit Judges; and

COFFIN, Senior Circuit Judge.*

The court’s opinion in this case is amended by deleting

the last paragraph under Part II.E. and substituting therefor

the following:

Defendant next argues that the evidence

is insufficient to sustain his conviction on

Counts 1 and 2. In this case, although

defendant made a motion for judgment of

acquittal under Federal Rule of Criminal

Procedure 29 at the close of the government’s

case and at the close of all the evidence,

defendant never argued to the district court that

the evidence was insufficient on Counts 1 and

2. Following the close of the government’s

* Honorable Frank M. Coffin, Senior Circuit Judge,

United States Court of Appeals for the First Circuit, sitting by

designation.

29a

case, defendant’s counsel made the following

argument to the district court, merely

reasserting his pretrial motion to dismiss on

statute of limitations grounds:

MR. ROTATORI: Okay, your Honor,

with regard to Counts 1 and 2, I think we can

take them together and save time because the

argument for both are [sic] the same.

With regard to Counts 1 and 2, the

defendant in support of its motion for a

judgment of acquittal pursuant to Rule 29,

incorporates by reference, the legal

memorandum submitted to the Court when the

defendant moved to dismiss Counts 1 and 2

based upon the statute of limitations.

THE COURT: So you have a statute of

limitations issue which is — which we have

roundly discussed, and I have denied.

And is there any additional basis found

within the evidence here at trial or lack —

asserted lack of evidence with regard to any

points in that case?

MR. ROTATORI: Substantively we

have no Rule 29 motion with regard to Counts

ae

THE COURT: Procedurally you wish

to reiterate your motion — I don’t even know

it’s necessary to do that, but in an abundance

30a

MR. ROTATORI: Just briefly. At the

time we made the motion prior to trial, we did

not have the testimony of, I think, the most

critical witness with regard to the government’s

position that the statute of limitation was

extended with regard to Counts 1 and 2

because of the allegation in the superseding

indictment... .

Trial transcript, Vol. XVII at 143-145. Defendant’s counsel

then proceeded to argue that there was insufficient evidence to

support the conviction on Count 6, charging obstruction of

justice, and that the failure of that charge would require

dismissal of Counts 1 and 2.

At the close of all evidence, defendant’s

counsel stated:

MR. LORD: We would make a general

renewal of our Rule 29 motions at the end of

the case.

THE COURT: So noted.

MR. LORD: I would make a specific

renewal as to two particular counts.

Defendant’s counsel then made specific arguments that the

evidence was insufficient on Counts 6 and 7. Trial transcript,

Vol. XXXVI at 9-11 (emphasis added). The district court

then rejected defendant’s challenges to the sufficiency of the

evidence on Count 6, and defendant has not contested that

ruling in this appeal.

3la

This court will not entertain a defendant’s challenge to

the sufficiency of the evidence on appeal unless the defendant

moved for a judgment of acquittal under Rule 29 at the close

of the government’s case-in-chief and at the close of all the

evidence. United States v. Williams, 940 F.2d 176, 180 (6th

Cir.), cert. denied, 112 S. Ct. 666 (1991). Such a failure to

make the required Rule 29 motions constitutes a waiver of an

objection to the sufficiency of the evidence. Jd. Although

specificity of grounds is not required in a Rule 29 motion,

see, United States v. Gjurashaj, 706 F.2d 395, 399 (2d Cir.

1983), where a Rule 29 motion is made on specific grounds,

all grounds not specified are waived:

However, where as here a motion for acquittal

is made on specified grounds which do not

include any objection to venue, we think that

objection has been waived. The specification

of grounds in the motion is an indication that

counsel has evaluated the record and has these

particular reasons for his motion. His omission

of venue from those reasons is similar to a

general failure to move for acquittal in spite of

the government’s failure to provide any

substantial evidence to support the alleged

venue. In the latter circumstances, the Sixth

Circuit found the objection waived, United

States v. McMaster, 343 F.2d 176, 181 (6th

Cir.), cert. denied, 382 U.S. 818, 86 S. Ct.

42, 15 L.Ed.2d 65 (1965); cf United States v.

Michelson, 165 F.2d 732, 734 (2d

Cir.)(dictum), aff'd, 335 U.S. 469, 69 S. Ct.

213, 93 L.Ed. 168 (1948).

32a

The Ninth Circuit has found waiver where the

defendant made a motion to acquit on specific

grounds and did not mention venue. Gilbert v.

United States, 359 F.2d 285, 288 (9th Cir.),

cert. denied, 385 U.S. 882, 87 S. Ct. 169, 17

L.Ed.2d 109 (1966); United States v.

Brothman, 191 F.2d 70, 72-73 (2d Cir.

1951)(dictum). We think this the proper result.

It is not unreasonable to expect the defendant to

make some reference to the venue point in

order to save his objection for appeal. Where

he moves to acquit without specification, we

might assume venue to be included among his

unarticulated disagreements with the conduct of

the case, but where he does specify grounds for

the motion and omits mention of venue we

must conclude that he cannot be considered to

have raised a question concerning the place of

the trial. Since there can be no doubt that

Rivera did move for acquittal on specific

grounds without mention of improper venue at

that time, he waived any objection he may have

had.

United States v. Rivera, 388 F.2d 545, 548 (2d Cir.), cert.

denied, 392 U.S. 937 (1968).

From the record, it appears that defendant’s Rule 29

motion did not challenge the sufficiency of the evidence.

After being directly asked by the court whether he challenged

the sufficiency of the evidence, defendant’s counsel replied

that he did not. Moreover, the foregoing authorities make it

clear that because defendant asserted specific grounds for his

Rule 29 motion, viz., the statute of limitations, defendant has

33a

waived all other grounds. Further, at the close of all the

evidence, defendant merely adopted his previous motion,

which we have found inadequate. Therefore, we hold that

defendant has waived his challenge to the sufficiency of the

evidence on Counts | and 2.

ENTERED BY ORDER OF THE COURT

/s/_ Leonard __ Green

Clerk

34a

APPENDIX C

Received Jun 3 1991

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

NORTHERN DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

Vv. Case No: 90-CR-50048-BC

90-CR-50054-BC

ALEX DANDY,

Defendant.

/

ORDER DENYING DEFENDANT’S

MOTION FOR DISQUALIFICATION

This matter is before the court on defendant’s motion

for disqualification pursuant to 28 U.S.C. § 455(a). Based on

the motion and accompanying documents, the court finds that

a reasonable person with knowledge of the facts presented

would not conclude that the judge’s impartiality would

reasonably be questioned. Defendant’s moiion is therefore

DENIED.

The underlying criminal complaint against the

defendant contains, among others, charges that he violated the

mail fraud statutes by engaging in a scheme to defraud NU-

TRAX, INC. Defendant was Chairman of the Board of

Directors of NU-TRAX. The indictment alleges defendant,

for the privilege of allowing them to do business with NU-

TRAX, required London’s Farm Dairy, Inc. (London’s), to

pay kickbacks to Michigan Milk Movers, Inc., of which

35a

defendant was sole shareholder. The government’s theory is

that defendant engaged in a scheme to defraud NU-TRAX,

INC. by means of false pretenses and misrepresentations and

that he used the mails, at least in part, to execute the scheme.

First in chambers and then on the record on May 19,

1991, this judge informed the parties that London’s had its

Origins and maintained its corporate base in Port Huron,

Michigan, and that, since he was a Port Huron native, it may

be no surprise that he has been an acquaintance of certain

members of the London family and a few London’s Farm

Dairy executives. Particularly, the court noted that, although

they were merely acquaintances, Mr. Douglas Mowat, an

executive in the corporation, was not only known to him, but

also may well have been among the several hundred people

who had contributed $10 or $20 to his campaign for re-

election as St. Clair County Prosecutor in the mid-to-late

1980’s. The government then confirmed the court’s initial

impression that Mr. Mowat would be a witness at Mr.

Dandy’s trial.

Based on this information, defendant moved for

disqualification. The government has responded and the

motion is ripe for review.

28 U.S.C. § 455(a) provides that "any justice, judge or

magistrate of the United States shall disqualify himself in any

proceeding in which his impartiality might be questioned."

The legal standard to be applied to a motion for

disqualification under this section is well established in the

Sixth Circuit:

A district judge is required to recuse himself

“only if a reasonable person with knowledge of

all the facts would conclude that the judge’s

36a

impartiality might reasonably be questioned."

This standard is objective and is not based "on

the subjective view of a party.”

United States v. Nelson, 922 F.2d 311, 319 (6th Cir. 1991).

Defendant argues that during the course of trial the

court will be called upon to rule regarding the admissibility of

Mr. Mowat’s testimony and possibly that of the owners of

London’s Farm Dairy. He contends that the court’s

longstanding reiationship with such witnesses may have a

conscious Or unconscious impact upon the court’s rulings.

Defendant further contends that serious questions of

impartiality may arise at and with regard to sentencing.

Lastly, defendant contends that the court’s relationship with

these witnesses lends an “appearance of impropriety" to the

proceedings.

The court finds defendant’s arguments insufficient both

in specificity and persuasiveness to warrant a grant of a

disqualification motion.

Firstly, this case will involve a jury trial.

Accordingly, the court will not be called upon to be a fact-

finder, and to weigh the credibility of the potential witnesses

— those will remain tasks for the jury. Secondly, although

defendant has suggested that the court will have to make

evidentiary rulings regarding Mr. Mowat’s testimony,

defendant has pointed to nothing to illuminate how the court’s

acquaintance with the witness could conceivably affect any

rulings on evidence admissibility. The fact that the court

knows Mr. Mowat, or were even considered a friend of his,

is irrelevant to the issue of whether “similar act" or other

evidence is admissible. The foundation or lack of it with

respect to "404(b)" evidence must rise or fall upon the quality

37a

of the evidence and the requirements of the law, not upon

witness credibility determinations by the court. Thirdly, it is

important to note that the indictment alleges that NU-TRAX,

INC. was the corporation victimized by fraudulent activity

not London’s corporately and not Mr. Mowat

personally. While defendant’s counsel, on the record on the

19th, suggested that there may exist personal animosity or

litigation, or both, between Mr. Mowat and Mr. Dandy, and

that that situation could be viewed objectively as a source of

tension in the court’s efforts to maintain neutrality, he presents

nothing in his motion to even reiterate, let alone to

substantiate that initial in-court- assertion. Nothing is proposed

by either the defense or the government that would

demonstrate that London’s or Mowat has any stake in the

proceedings or anything at all to gain or lose from the

outcome of this case.

Finally, defendant has suggested nothing as to how the

court’s acquaintance with Mr. Mowat could be a factor

affecting sentencing should the jury return a verdict of guilty.

This case is not one in which just one critical witness —

Mowat — is the keystone to a successful sentencing argument

brought by the government, with a favorable determination by

the court of that witness’s story spelling sentencing-guidelines

doom for the defendant. Were that scenario even minimally

suggested by the facts as made known to the court here, the

result could arguably be different. The defendant, however,

is silent on this feature of the case as well. Indeed, the

Guidelines’ leveling and objectifying effect itself denies wind

to the sails of defendant’s argument in this respect.

The defense here has presented a sensible and accurate

dissertation on the state of the law in the area of

disqualification, but provided little of substance in the pursuit

of a fair and accurate determination of the issue in this case.

38a

Based on the paucity of affirmative evidence presented, the

court must determine that a reasonable person would not

conclude that the court’s impartiality would be questioned.

Defendant’s motion for disqualification must consequently be

DENIED.

IT IS SO ORDERED.

/s/ ROBERT H. CLELAND

UNITED STATES DISTRICT JUDGE

DATED: May 30th, 1991

39a

APPENDIX D

UNITED STATES COURT OF APPEALS

SIXTH CIRCUIT

U.S. POST OFFICE & COURTHOUSE BUILDING

CINCINNATI, OHIO 45202-3988 |= TELEPHONE

LEONARD GREEN (513) 664-2953

CLERK FTS 684-2953

August 11, 1993

Mr. Robert Haviland

Mr. Richard L. Stoper, Jr.

Re: Case Nos. 92-1702/1840

USA v. Dandy

Dear Counsel:

Upon consideration of the petition for rehearing en

banc filed by the appellant in the above case, the hearing

panel has issued the enclosed order.

In light of the panel’s action, we ask that counsel for

the appellant to determine whether the petition for en banc

reconsideration is to be withdrawn. If it is not, the appellant

shall have until Wednesday, September 1, 1993 to file a

memorandum of law supplementing their original petition.

Should the appellee wish to seek en banc reconsideration of

the enclosed opinion, they may do so by filing no later than

Wednesday, September 1, 1993 and appropriate petition

conforming with the requirements of the Federal Rules of

Appellate Procedure and the Rules of the Sixth Circuit. If this

office does not hear from either party by the close of business

on September 1, we will render the petition moot and no

further action will be taken.

40a

Any party filing an additional petition or memorandum

should file twenty-five (25) copies of each document.

Very truly yours,

/s/ Leonard Green

Clerk

4la

APPENDIX E FILED

SEP 15, 1993

EN, Clerk

Nos. 92-1702/1840 LEONARD GRE er

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

ALEX DANDY,

Defendant-Appellant.

BEFORE: MILBURN and RYAN, Circuit Judges; and

COFFIN,’ Senior Circuit Judge.

The court having received a petition for rehearing en

banc and its supplement based on the order amending the

opinion, and the petition and supplement having been

circulated not only to the original panel members but also to

all other active judges of this court, and no judge of this court

having requested a vote on the suggestion for rehearing en

banc, the petition for rehearing has been referred to the

original hearing panel.

The panel has further reviewed the petition for

rehearing and its supplement and coretudes that the issues

raised in the petition were fully considered upon the original

submission and decision of the case. Accordingly, the petition

is denied.

ENTERED BY ORDER OF THE COURT

/s/ Leonard Green

Clerk

“ * Hon. Frank M. Coffin, Senior Circuit Judge for the

United States Court of Appeals for the First Circuit, sitting by

designation.

42a

APPENDIX F

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

NORTHERN DIVISION

UNITED STATES OF AMERICA

-VS- No. 90-20054-FL

ALEX DANDY, MOTION

Defendant.

/

Proceedings had and testimony taken in the above-

entitled matter before the Honorable Robert H. Cleland,

United States District Judge, at Bay City, Michigan, on the

14th day of May, 1991.

APPEARANCES:

STEPHEN MARKMAN, U.S. ATTORNEY

BY: ROBERT HAVELAND, AUSA,

AND THEODORE FOREMAN, AUSA,

Appearing on behalf of the Government

ROBERT ROTATORI, EsqQ., and

WARREN J. PERLOVE, EsqQ.,

Appearing on behalf of the Defendant.

x * *

THE COURT: Thank you. -

Counsel both for the government and for the defense

had a brief opportunity, roughly an hour ago, to discuss order

of arguments and some other issues preliminarily in chambers

and off the record.

43a

At that time I notified both sides that I was acquainted

with a person whom I since have been informed will be a

witness in this case.

This individual’s name is Douglas Mowat, who is an

executive with London Farm Dairy, Inc. which is a Michigan

corporation with its headquarters, as I’m informed, its

headquarters in Port Huron, Michigan.

I hale from Port Huron, Michigan, maintain a home

there and have been acquainted with various members of the

London family over the course of twenty — closer, really, to

thirty years.

I informed counsel that Glen London, one of the senior

members of that family, was an across the street neighbor of

my parents and myself when I was in college — up through

the time I was in college and law school. To my knowledge

he’s no longer associated with the corporation, I think he’s

retired from that. I may be incorrect, but in any event I’m

acquainted with a friend of his.

Additionally, I am acquainted with a Michigan State

representative named Terry London, who is from the Port

Huron metropolitan area, Marysville, Michigan. He’s not, to

my knowledge, in any way associated with the corporation but

is a — I think he’s a nephew of Glen London and his son or

one of the other London brothers.

He’s fulltime in public service, though, to the best of

my knowledge.

Finally with respect to Douglas Mowat, this is an

individual whom I have known for close to twenty years in

one fashion or another, as he was working his way up through

the corporate structure.

44a

He and I, though we are on friendly acquaintance

terms, have never socialized at one another’s houses. We

have commonly met, however, at community functions,

dinners, testimonials, fund raisers and things of that nature

over the course of years.

Before I took this job I was an elected official in St.

Clare County, I was the prosecuting attorney of that county,

and although I did not have political opposition in any of my

campaigns, I did throw fund raiser celebrations annually. And

although I’m not positive of it, I would expect that Mr.

Mowat and probably his wife, quite likely others from the

London organization, were contributors to my campaign to the

tune of perhaps ten or twenty dollars apiece, something along

those lines.

I expect that that was sporadic and not regular, and in

no event do I think there was anything particularly significant

about that — significant financially about any of that.

I think I haven’t seen Mr. Mowat in well over a couple

of years now and certainly have not had any discussion with

him over the facts of this case during any of this time.

Nor do I think I have discussed his business with him

at all, quite frankly. I have discussed community affairs

perhaps from time to time but not anything about London

Dairy.

Now, that in combination with the fact that I

occasionally drink London’s milk and eat London’s ice cream

puts the parties fully on notice, I think, as to — in terms of

what the Court may personally have in the way of history on

this affair.

I put it to defense counsel and to the government to

react to this disclosure, and to let me know if either side

45a

believes that there is anything that need be done by the Court

with respect to these.

First of all, Mr. Haveland on behalf of the

government, you told us in the previous discussion Mr.

Mowat will indeed be a witness in this case, true?

MR. HAVELAND: That is correct, your Honor. I

would like to amplify that slightly. He did testify at the grand

jury and the defense has already gotten a copy of his grand

jury testimony.

THE COURT: All right. Now, Mr. Rotatori?

MR. ROTATORI: Yes, your Honor. It’s a bit more

complicated for the defense. I believe Mr. Mowat is going to

be the chief government witness with regard to at least one

count on this indictment, and perhaps providing testimony

with regard to other — which would be relevant to other

counts in the indictment.

Additionally, I just found out from Mr. Dandy that

apparently there was some civil litigation between Mr. Mowat

and London Farm Dairy and Mr. Dandy and Hamady

Brothers Food Centers.

Of course, this is the first time that this subject has

been broached to Mr. Dandy, we would beg the Court’s

indulgence to have a day or two before we respond to the

Court with regard to this issue.

THE COURT: Can we legitimately make any progress

with the motions that are scheduled for progress this

afternoon, counsel, without resolution of this issue?

MR. ROTATORI: I would guess not, now if the

Court —

46a

THE COURT: That’s why I wanted to handle this

right at the beginning, counsel.

MR. ROTATORI: I appreciate the Court’s concern,

and I would agree with the Court. I mean, if it is of the

nature that would cause the defense to raise an objection then

obviously the Court probably shouldn’t even hear the motions.

THE COURT: Certainly, at least I shouldn’t decide

them.

MR. ROTATORI: I would agree with the Court in

that regard. The only thing I can say is this sort of takes us

by surprise. We-really hadn’t ——

THE COURT: Have you made any progress in the

last hour in ruminating about this counsel?

MR. ROTATORI: No, we discussed it briefly before

we entered into the courtroom, at that time the Court was

taking a plea.

I suppose — frankly, as counsel for Mr. Dandy, I

would like to do some investigative work into this litigation,

you know, whether there was personal animosity between Mr.

Mowat and Mr. Dandy, that type of thing, whether Mr.

Mowat has certain opinions with regard to Mr. Dandy’s

business style or ethics, and whether those — whether all

would be relevant and whether those expressions from Mr.

Mowat, a quote friend of the Court as the Court has described

it, would raise to the level of requiring the defense to ask the

Court to recuse itself.

THE COURT: I can conceive, counsel, of a set of

circumstances in which that would — it would give a

defendant pause. I don’t think there’s any reason for that at

this point, quite frankly. I think that I — I’m going to give

you the benefit <f my feeling about it, without prejudice to

47a

your ability to raise it, and determine what you think you need

to do.

I think I am far enough distant from any particular

friendship or former association with Mr. Mowat or any of

the others in the London organization that I would not be

influenced by apparent feelings of animosity if any were the

case.

But I think it’s only fair to give you a chance to

ruminate about it further beyond just the 60 minutes or so you

have had here.

I will — I hate to bring six people together for an hour

and a half this afternoon without reaching any result on these

things or allowing you to express your feelings about your

various motions though. I’m inclined to receive some

comments on the merits of your motion on Counts 1, 2, 8 and

9 at a minimum.

Mr. Haveland, just a moment ago you rose to address

something, do you want to express some other feeling about

this?

MR. HAVELAND: I apologize, your Honor, for

rising but I fear the Court was about to rule, and I do want to

oppose any motion to adjourn these arguments.

The defendant has today filed a motion to adjourn this

case yet again after at least four adjournments have already

been granted, most of them with the stipulation of the

government. I do not see any basis for a further adjournment

at this point.

The only think Mr. Rotatori has stated is that his client

has informed him of some litigation between Mr. Mowat and

Mr. Dandy.

48a

So be it. I have no information —

THE COURT: Between the corporations, I think, was

it not? Was it personal litigation?

MR. ROTATORI: There was personal litigation in

addition to business litigation between the corporations, yes.

It was both.

MR. HAVELAND: My argument makes — admits no

distinction. Even if it was personal litigation between the two

of them, so much the better for the defendant, he will have —

that available to impeach Mr. Mowat at trial.

The point here is whether the Court’s knowledge of or

friendship with Mr. Mowat would have any conceivable

impact on the jury, which is going to be the finder of fact in

this case.

Mr. Rotatori has not suggested anything that in any

way would affect the jury’s determination. Under those

circumstances, I just do not see the point in adjourning the

argument on these motions. I have no objection to him being

given additional time to come up with some theory on which

this fact should affect the trial, but I see no reason to delay

matters right now.

THE COURT: Mr. Haveland, it’s more than a

defense decision. I don’t think the Court’s acquaintanceship

with any particular witness would have any bearing on this, if

such were urged I wouldn’t go along with that line of

argument. The concern I would have from the defense side

of this would be in the event of conviction and impending

sentence.

The thing I think Mr. Dandy’s point of view needs to

be resolved about is the Court’s independent or potential

impact on a variety of things that may have.

49a

I reiterate, I think it would have none, quite frankly,

but that’s not determinative in my opinion.

I’m going to adjourn the hearing on these motions but

I’m not going to adjourn them for long. I’m going to — this

is Tuesday afternoon, and counsel for the defendant will

inform my courtroom deputy clerk no later than the close of

business on Thursday afternoon, the 16th of May, and

concurrently inform me either by telephone or Fax

transmission to Mr. Haveland on behalf of the government,

any reaction along — a reaction one way or the other with

respect to these issues we have discussed this afternoon.

At that time I’m going to be prepared to set a

substitute hearing date. In the event I determine that either by

stipulation or through my own judgment, the matter would be

continued very shortly thereafter, within days I think,

thereafter for argument on these issues.

You’re all from Flint, are you not, gentlemen?

MR. ROTATORI: I’m from Cleveland, Ohio, your

Honor.

THE COURT: Where are you from?

MR. PERLOVE: I live in Ann Arbor, but I practice

in Flint, Judge.

THE COURT: Apparently there are regular flights

from Cleveland into Flint?

MR. ROTATORI: Yes, there are.

THE COURT: Mr. Haveland, I think you’re stationed

in Flint?

MR. HAVELAND: Yes, your Honor.

50a

THE COURT: The tax attorney?

MR. FOREMAN: Washington, DC, your Honor, but

there are also regular flights in from Washington.

THE COURT: All right, counsel, that’s the schedule.

Thursday the 16th, by the close of business — that’s going to

be 5:00 o’clock p.m. — inform the Court, or before that,

certainly a day in advance of that would be even better, but no

later than that. You'll have enough time to inquire further of

Mr. Dandy, and to do whatever additional research or

thinking you think may be appropriate on this, and we’ll

determine an appropriate course of action following that.

x * *

Sla

APPENDIX G

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

NORTHERN DIVISION

UNITED STATES OF AMERICA

-VS- No. 90-20054-FL

ALEX DANDY, VOLUME XVII

Defendant.

/

Proceedings had and testimony taken in the above-

entitled matter before the Honorable Robert H. Cleland,

United States District Judge, at Bay City, Michigan, on the

8th day of October, 1991.

APPEARANCES:

STEPHEN MARKMAN, U.S. ATTORNEY

By: ROBERT HAVELAND, AUSA,

AND THEODORE FOREMAN, AUSA,

Appearing on behalf of the Government

ROBERT ROTATORI, ESQ., and

KENNETH LORD, ESQ.,

Appearing on behalf of the Defendant.

x * *

THE COURT: All night, counsel, the defendant has

absented himself through consent, and we will have some time

here to discuss Rule 29 motions. Mr. Rotatori, you may

proceed from counsel table, if you wish.

MR. ROTATORI: Is it the Court’s desire we address

tax counts even though there hasn’t been —

52a

THE COURT: Here’s how I — I think I made this

clear at sidebar conference, although some of it may not have

been recorded. It seems to me that the government’s case is

substantially concluded at least with respect to direct

examination in the first instance on the summary witness.

Therefore, all of the affirmative evidence the government

would seek to present is in, and failing some kind of major

retraction by the summary witness on cross examination,

that’s the only thing that remains now before the close of the

government’s case as Mr. Haveland has indicated.

It seems to me that you can — we can roll all of this

together and take, even though it’s just a moment or two in

the history of this case premature, technically, I think we can

take this as having been conducted at the close of

government’s proofs. And the government has no objection

to that procedure, I take it?

MR. HAVELAND: Correct.

THE COURT: Let’s proceed on that basis.

MR. ROTATORI: Okay, your Honor, with regard to

Counts | and 2, I think we can take them together and save

time because the argument for both are the same.

With regard to Counts 1 and 2, the defendant in

support of its motion for a judgment of acquittal pursuant to

Rule 29, incorporates by reference, the legal memorandum

submitted to the Court when the defendant moved to dismiss

Counts 1 and 2 based upon the statute of limitations.

THE COURT: So you have a statute of limitations

issue which is — which we have roundly discussed, and I

have denied.

53a

And is there any additional basis found within the

evidence here at trial or lack — asserted lack of evidence with

regard to any points in that case?

MR. ROTATORI: Substantively we have no Rule 29

motion with regard to Counts 1 —

THE COURT: Procedurally you wish to reiterate your

motion — I don’t even know it’s necessary to do that, but in

an abundance —

MR. ROTATORI: Just briefly. At the time we made

the motion prior to the trial, we did not have the testimony of,

I think, the most critical witness with regard to the

government’s position that the statute of limitation was

extended with regard to Counts 1 and 2 because of the

allegation in the superseding indictment that the — one of the

acts of evasion constituted the concealing and attempting to

conceal from proper officers of the United States of America,

the income due. ne :

Ny

The counts — both Counts 1 and 2 allege that the

evasion occurred from a particular date of filing ofthe return

through November of 1985. I assume November of ’85-is: the

magic date that brings them within the statute of limitations,

primarily because of evidence concerning the defendant’s

preventing the Internal Revenue Service from obtaining the

McDonald Dairy checks.

In that regard we now have the testimony of Mr.

Cowan, and I suppose, your Honor, we could include at this

point in time, the charge in the indictment — since it also

refers to Mr. Cowan — that is Count 6, which is the

obstruction of the IRS audit.

I think the statute of limitations argument in that

obstruction of the IRS audit argument are interrelated. I

believe it’s clear that the testimony of the Jim Cowan was that

54a

~ with regard to the November 1985 IRS summons, he went to

see Alex Dandy, that he discussed the checks that were called

for in the summons. Mr. Cowan indicated that Alex Dandy

had a different position with regard to so_ne of the checks than

he did. That he left that meeting and he went back to Mr.

Geoghan, and Mr. Cowan said he told Mr. Geoghan to turn

them all over.

Mr. Geoghan’s testimony, on the other hand, was that

Cowan told him not turn them all over.

Whether or not Cowan told Geoghan to turn them over

or not turn them over, I think, fails to establish any

connection with the defendant. Cowan was clear that Dandy

had a different position, that he decided to turn them over

anyway. So I don’t see how the evidence supports the

obstruction of that summons in November of ’85 as alleged in

Count 6. There’s no connection with the failure to turn over

and Dandy. The only possible connection would have been

Cowan, and Cowan testifies to the contrary.

So I think Rule 29 should be granted with regard to the

obstruction count, Count 6. That being the case, then the

government loses their underpinnings for extending the statute

of limitations as we have argued before in Court and

submitted memorandum. We feel Counts 1 and 2 should be

dismissed under Rule 29 based upon the statute of limitations

argument we have presented to the Court previously.

THE COURT: Okay. Let’s take these in series, Mr.

Haveland, a comment please from the government with

respect to the testimony of Mr. Cowan, Mr. Geoghan and

inferences that could be drawn legitimately by a finder of fact

with regard to those things.

MR. HAVELAND: Very briefly, your Honor. It is

my recollection of Mr. Cowan’s testimony that both in

January and again in November of 1985, as soon as

55a

McDonald Dairy had been served with the IRS summons, Mr.

Cowan met with Mr. Dandy, discussed the summons, asked

Mr. Dandy what he should do and Mr. Dandy instructed him

in no uncertain terms not to deliver the third party checks that

had been pulled out by Ed Geoghan under Mr. Cowan’s

instructions. These are checks but for Mr. Dandy’s

directions, McDonald would have delivered to the IRS both in

January and in November of 1985.

That in itself, in November of 1985 Mr. Dandy’s

instruction to Mr. Cowan not to deliver the third party checks,

is all that is required to prove an attempt to continue the tax

evasion scheme within the five year period — excuse me, six

year period.

Now, it is true that Mr. Cowan was somewhat — his

testimony was that he disregarded Mr. Dandy’s advice in

November of 1985 and instructed Mr. Geoghan to turn over

all the checks. In fact, however, Mr. Geoghan testified to the

contrary, that Mr. Cowan did not instruct him to do that, that

Mr. Cowan instructed him to withhold certain checks. Both

Mr. Geoghan and Mr. Draheim have testified that McDonald

Dairy did not, in fact, turn over these third party checks.

You may recall that Mr. Geoghan testified he still had

those checks segregated and he gave them to Agent Georgeff

approximately three or four years later.

But regardless of all that, all that is required is an

attempt by the defendant to evade taxes within a statutory

period. The testimony of Mr. Cowan is unequivocal that Mr.

Dandy told him not to give those third party checks.

THE COURT: My notes in this section of Mr.

Cowan’s testimony indicate that he stated to the effect: I felt

pressured, he represented a lot of business to McDonald Dairy

— speaking of Mr. Dandy — and when asked about the issue

of the checks, whether to turn them over, whether to segregate

56a

them, whether to take them as indicative of some unimportant

and ancillary event as Mr. Dandy was apparently trying to

construe them at that meeting, taking the evidence in the light

most favorable to the government — which is, of course, the

required standard here — the Court finds that a reasonable

trier of fact could conclude from all of the evidence and

inferences drawn from the evidence that the defendant, indeed,

was attempting to deal with Mr. Cowan in a way that would

have the effect, and intentionally so, of interfering with the

audit. The motion with respect to Count 6 accordingly must

fail.

And with the same finding, the Court determines again

here that based upon evidence at trial, that there is a rational

foundation for the statute of limitations challenge that’s been

raised by the defense. And with respect to Counts 1 and 2

then the motion additionally will be denied.

*x* * *

57a

APPENDIX H

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Nos. 92-1702 and 92-1840

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

V.

ALEX DANDY,

Defendant-Appellant.

Appeal from the United States District Court

for the Eastern District of Michigan,

Northern Division

BRIEF FOR THE UNITED STATES

ARGUMENT

I. THE TRIAL JUDGE’S ACQUAINTANCE

WITH ONE WITNESS DID NOT CREATE A

REASONABLE QUESTION AS TO THE

JUDGE’S IMPARTIALITY.

District Judge Robert H. Cleland informed the parties

months before trial that he was acquainted with Douglas

Mowat, the president of London’s Farm Dairy, Inc., a

58a

corporation mentioned in the indictment. (Hearing of Mary

14, 1991 at 3-5). He described his relationship as a "friendly

acquaintance,” and stated that Mowat had probably contributed

$10 or $20 to his campaigns for state circuit court judge; he

had not seen Mowat "in well over a couple of years now and

certainly [had] not had any discussion with him over the facts

of this case . . . [nJor do I think I have discussed his business

with him at all." Id, The government had previously given

defense counsel a transcript of Mowat’s grand jury testimony

in the case. Id, at 6.

Defendant filed a motion for disqualification of Judge

Cleland. (R. 48). The motion was based solely on Section

455(a), which provides that "Any . . . judge . . . of the

United States shall disqualify himself in any proceeding in

which his impartiality might reasonably be questioned.” Judge

Cleland denied the motion in a thorough written order. (R.

52: Order Denying Motion).

The legal standard to be applied to a recusal motion

under section 455(a) is well-established in this Circuit:

A district judge is required to

recuse himself “only if a

reasonable person. with

knowledge of all the facts would

conclude that the judge’s

impartiality might reasonably be

questioned.” This standard is

objective and is not based "on

the subjective view of a party."

United States v, Nelson, 922 F.2d 311, 319 (6th Cir.), cert

denied, 111 S. Ct. 1635 (1991). Application of this standard

requires a brief discussion of the facts.

The most important fact to be considered in the instant

case is that it involved a jury trial, not a bench trial. The

a

59a

credibility of witness Mowat was to be determined by the

jury, not the trial judge. Indeed, the jury was never made

aware of the witness’ acquaintance with the judge, a fact that

was utterly irrelevant to the trial. Second, there was no

uncertainty about the nature or scope of Mowat’s expected

testimony, as defense counsel already had a copy of his grand

jury testimony. Defendant advanced no unusual legal issue

likely to arise during Mowat’s testimony and none in fact did.

Finally, Mowat was neither a party in the case nor a

victim of any of the crimes charged. (Defendant’s contrary

claim in his brief on appeal at 13-14 is simply not supported

by the testimony he cites; that Mowat arguably was impeached

does not mean that he was a victim)." The indictment

charged that defendant defrauded the Chatham Supermarket

chain by misappropriating kickbacks paid by its supplier,

London’s Farm Dairy. Mowat, the President of London’s,

was hardly a victim; he and his firm actually benefited from

the increased business Dandy steered their way. The only

entity defrauded was Chatham/Nu-Trax, which paid higher

prices for dairy products because its Chairman, Dandy,

demanded personal kickbacks instead of rebates for the

corporation. Accordingly, there was no reason to believe that

Judge Cleland’s acquaintance with the witness would affect the

Case in any way.

Defendant cites no case in which recusal was ordered

under circumstances even remotely similar to these. This

Moreover, even prior contact with the victim of a

crime is not sufficient to require recusal of a judge. United

States v, Cuyler, 584 F.2d 644 (3d Cir. 1978), cert. denied,

440 U.S. 925 (1979) (trial judge had known murder victim

and attended his funeral); United States v. Story, 716 F.2d

1088, 1091 (6th Cir. 1983) (trial judge had previously

represented the victim - VFW National Home - and had

recommended it to clients as a charitable bequest).

60a

court has recently affirmed decisions not to recuse in

circumstances far more suspicious. For example, in Easley v.

University of Michigan Board of Regents, 906 F.2d 1143 (6th

Cir. 1990), cert. denied, 111 S. Ct. 1414 (1991), a bench trial

was at issue. The trial judge was closely involved with the

defendant University as an alumnus, a volunteer fund-raiser,

a member of its Law School’s committee of visitors, and a

member of the athletics support club. Nevertheless, the Sixth

Circuit held that “the amicable feelings Judge Feikens

undoubtedly has for his alma mater, the University of

Michigan, fail to demonstrate a sufficient basis for his

recusal." The court’s judgment for the school was affirmed.

Detroit Mayor Coleman Young has been the subject of

at least two motions to recuse trial judges. In Baker v. City

of Detroit, 458 F.Supp. 374 (E.D. Mich. 1978), plaintiffs

moved to disqualify then-District Judge Damon Keith due to

his close friendship with the mayor; the motion was denied.

On the other hand, In Re City of Detroit, 828 F.2d 1160 (6th

Cir. 1987), overruled (on mandamus issue only), In Re Aetna

Casualty and Surety Co., 919 F.2d 1136 (6th Cir. 1990),

involved a motion by the City to recuse Judge Feikens, whom

it accused of bias and prejudice against Major Young and

other city officials. This court held that the City’s appeal of

Judge Feikens’ refusal to recuse himself was not cognizable by

way of a writ of mandamus; in an alternative holding,

however, it ruled that the record revealed neither actual bias

nor the appearance of partiality, despite the fact that Judge

Feikens had been severely criticized by other judges and the

media for his published comments concerning Major Young

and his administration of the City departments at issue (water

and sewage). Both these cases, too, involved bench trials; yet

recusal was still not required.

This court discussed the issue most recently in United

States v. Hurst, 951 F.2d 1490 (6th Cir. 1991), cert. denied,

112 S. Ct. 1952 (1992). In that case the trial judge, while a

private attorney years earlier, had filed a lawsuit against

ees

6ia

defendant Burnett on behalf of a group of investors alleging

fraud. Burnett’s motion for recusal pursuant to 28 U.S.C.

§455(a) was denied, and this court affirmed: "We are satisfied

that a reasonable person would consider the trial judge to be

impartial in this matter and find no prejudice toward defendant

Burnett." 951 F.2d at 1503.

The merits of defendant’s pretrial motion must be

determined, of course, on the basis of the record as it existed

at the time the court ruled, nearly four months before trial

began. On appeal, however, defendant attempts to buttress

that motion by arguing that Judge Cleland imposed an

“extraordinarily harsh" sentence in order to vindicate his

friend Mowat. That sentence, however, was fully justified by

the record evidence of the ten felonies Dandy committed, and

the tens of millions of dollars in losses he imposed on

hundreds of employees and other creditors of two major

bankrupt supermarket chains. Far from being harsh, the

sentence imposed likely will lead to Dandy’s release on parole

after serving only 1/3 of his sentence (92) months) —

considerably less than the guideline range established by the

U.S. Sentencing Commission for such crimes committed after

November 1, 1987 (108-135 months). (R. 144: Supplement

to Government’s Sentencing Memorandum). Any reasonably

objective observer would conclude that this sentence reflected

the nature and circumstances of Dandy’s crimes and his prior

criminal record, rather than the trial judge’s slight familiarity

with one witness whom he had not seen for years.

To discourage forum-shopping, a trial judge must hear

cases unless some reasonable factual basis to doubt his or her

impartiality or fairness is shown by probative evidence.

Blizard v. Frechette, 601 F.2d 1217, 1221 (1st Cir. 1979).

Here, the trial judge’s mere “friendly acquaintance” with one

of the government’s 56 witnesses at a ten-week long jury trial

did not create a reasonable question as to the judge’s

impartiality. Accordingly, defendant’s motion to disqualify

Judge Cleland was properly denied.